‘Malawi sitting on gold deposits’

Communities in Ntcheu, Neno and Balaka have turned to gold panning in a bid to survive the country’s deteriorating economy and worsening food situation leaving a trail of destruction that has alarmed farmers, government officials and environmental experts. In this third and final part, our reporter BOBBY KABANGO explores the good side of gold mining and what role artisanal or small-scale gold miners can play in an economy.

Malawi is an exciting new gold producing country in Africa, with most of its gold resources still unexplored, an expert says.

Men remove rocks from Nyuludzi River bed to pave way for gold panning

He says ‘the gold rush’ in Neno, Balaka and Ntcheu is evidence that Malawi is sitting on gold and the country has potential to produce gold in large quantities.

Former mining minister Grain Malunga has been conducting research on Malawi’s potential as a gold producer, and says Malawi has huge potential.

“Malawi has great potential for gold and I urge government to be serious with it. We have great potential, but we need to find out from solid sources not only in rivers,” he says.

Malunga is coordinator at the Malawi Chambers of Mines. He now wants to see to it that the country benefits from its minerals and natural resources.

“Malawi can start getting more money from minerals if we properly manage these resources. We are losing a lot of money through illegal mining of minerals such as gold,” he says.

Director of the Geological Survey Department Jalf Salima says historically, primary gold has been previously mined in the Kirk Range-Lisungwe in Neno/Mwanza area at a small-scale.

“Traces of alluvial gold is found in numerous rivers throughout the country. Areas like Kirk-Range Lisungwe valley, Dwangwa in Nkhotakota, Malindi-Makanjira in Mangochi, Nathenje in Lilongwe and Chitipa-Kameme.

“This offers guidance for prospecting primary gold deposits. Mapping and geochemical surveys and exploration companies have revealed that the gold is hosted in decimetre-scale quartz lobes and stringers zones, and enhanced residual concentrations occur in the overlying regolith,” he explains

But is gold potential enough for Malawi to pin its hopes on as Malawi’s main foreign exchange earner to replace tobacco?

Salima says the potential does exist.

“The fact is Malawi is a green field with potential of discovering economic mineral deposits. What is required is to conduct detailed exploration to define [quality and quantity] of the resources and determine the economic potential of the gold deposits,” he explains.

He also admits that current artisanal and small-scale mining activities have potential to contribute significantly to the social-economic development of Malawi.

“It is worth noting that informal artisanal and small-scale miners (ASM) have a greater impact on the local rural economy.

“The income earned is spent on basic needs, education and patronising of local businesses. This further helps the people to overcome unemployment and poor harvests by exploiting marginal deposits that are not attractive to large mining companies,” says Salima.

But he laments illegal trading of minerals as currently the case in Neno, Ntcheu and Balaka, as it leads to loss of revenue for the government through taxes and royalties.

“Illegal trading of gold leads to loss of foreign exchange and can promote bad practices like money laundering, child labour and other vices and destruction of the environment.

Miners at Nyuludzi gold mine camp confessed that they sell most of the gold to dealers from across the borders especially Mozambique.

One of the small-scale miners Elita Simango, who has been involved in mining gold in Nyuludzi River for a year, says together with her sons, they fetch up to K40 000 a day in illegal gold trades.

On the day Weekend Nation visited the site, she panned gold weighing 1.51 ounce and she sold it at K25 000. The same gold would fetch her K1.4 million if sold on the international market.

“Most of the time we sell nuggets at K25 000 or K30 000 to buyers from Mozambique, because there is no market for it locally. It’s illegal to sell gold here,” she explains.

According to Salima, ASM is a poverty driven activity motivated by earning a living and prospects of hitting the jackpot. As such most of the miners prefer to operate in the informal system.

“Most of the ASM operators lack the initial capital to obtain a licence, conduct mining, buy proper equipment and have no access to loans, as such they are vulnerable to unscrupulous middlemen who buy the minerals at below market prices,” he adds.

Acting director of mining in the Ministry of Mines and Natural Resources Ackim Wona says the artisanal and small-scale miners must stop mining the gold.

He says the ministry is not aware of the activities and no license was given to them.

“I am not aware that people are mining gold [in those areas]. That is news to me,” he said while adding that it is an offense to mine gold because one has to be licensed before they can mine gold.

“In fact, in Makanjira in Mangochi, some people were also mining gold. Ministry officials went there and we have stopped the activities.”

But Salima points to Malawi’s legal framework regulating mining as being inadequate.

“You may be aware that we have Mines and Minerals Policy of 2013; we have drafted an Artisanal and Small-scale Mining Policy and have also reviewed the Mines and Minerals Act 1981. The Bill is ready to be tabled in Parliament.”